Rebecca Riley Business Development Director @CityREDI @RileyResearch #analystFEST
Welcome! 9.35 The Combined Authority and the role of data, research and intelligence Martin Reeves 9.50 Political mandate, public policy and data and analysis - Tony Bray 10.15 Evidence supporting WMCA Strategic Economic Plan - Delma Dwight 10.30 Panel Q&A on research demand 10.45 Coffee break 11.00 Meet the research project session 1 11.45 Lunch and networking 12.45 Meet the research project session 2 13.30 How the universities are supporting decision making in the West Midlands Richard Kenny 13.45 LARIA – promoting collaboration - Andy Davis 14.00 Team West Midlands – the research capacity across the region - Andy Baker 14.15 Panel Q&A on research supply 14.30 First steps to collaboration – getting Data Ducks in a row - Rebecca Riley 14.45 Closing remarks – Simon Collinson
AnalystFEST Event Programme Tuesday 24 January 2017 Dr Martin Reeves Chief Executive, Coventry City Council Chief Executive, WMCA
Political mandate, public policy and data and analysis AnalystFest: Tuesday 24 th Jan 2017, Birmingham Tony Bray Area Director – West Midlands, Cities and Local Growth Unit Department for Communities and Local Government and Department for Business, 5 Energy and Industrial Strategy
What will I say... Context – a changing world? A public policy framework Analysis making a difference – some case studies Wrap up 6
Context – A changing world? 7
A public policy framework LEGITIMACY Political mandate based on public confidence. Counter views can be ignored or managed by stakeholder engagement. How much ‘political capital’ is a policy worth? POLICY Legitimate policy clearly links to the political mandate. Evidence informs choices – rarely just one way of doing something. And evidence informs how to implement a policy. ACTION Centre for Public Impact 2016 Delivery is king 8 Source: ONS 8 8
Political mandate, policy and analysis Cumulative GVA growth by LEP POLITICAL MANDATE Provides headline legitimacy for policy intent Constantly tested by opposition views, media and public Balance between political philosophy, complexity of delivery and other priorities POLICY Converting policy intent into firm, agreed and adopted policies Evidence and analysis is critical. ACTION Performance management critical to demonstrating impact. Benefits and value for money. Lessons learned – evaluation. 9 Source: ONS 9
Case study: The journey to LEPs and beyond.... Cumulative GVA growth by LEP • Policy intent 2010: Abolish Regional Development Agencies – develop a more An approximation of “functional economic localist solution. Subsequently further deepened through devolution deals. areas” across England 2 • Analytical approach: Choice: devote a lot of resource to thinking about functional economic areas or establish principles based on evaluation – The importance of developing a local strategy rather than rushing to specific interventions: City Challenge Fund evaluation underlined the need to develop a clear, robust and realistic strategy that targets local needs. Then easier to make difficult decisions on prioritising limited resources. Early focus on Strategic Economic Plans. – Organising at the appropriate spatial scale: Growing evidence that local growth institutions reflect real economic geography (Functional Economic Areas). The latest economic evidence suggests growth penalty c.5-6% for each doubling in the number of administrative units in a city region. This is one of the key rationales for LEPs and MCAs. – The value of co-ordinating efforts: Factors found to make good partnerships work in the SRB context included the need to avoid ‘arranged marriages’ no matter how convenient and instead building on what already exists. Bottom- up approach to LEP partnerships. – Clear accountability and incentives: Multiple evaluations highlight being clear who does what and the tools they have leads to successful delivery and impacts. Develop role of LEPs, with MCAs where areas choose. – The importance of better monitoring and evaluation at the right time: The evidence shows that many ineffectual schemes have been recycled and rebranded through a revolving door of area-based initiatives. Established the What Works Centre and the Gainshare evaluation panel. • We continue to work very closely with analysts and academic experts as we develop our policy. 10 Source: ONS 10
Case study: Delivering more homes Cumulative GVA growth by LEP • Policy intent 2016: Increase scale and pace of house building to increase supply, mix of tenures and improve affordability. • Analytical approach: What are the barriers to investment and how could it be incentivised? • Three primary barriers to commercial viability: – prohibitive up front costs (land acquisition, remediation etc.); – uncertainty over long-term income generation; – and a lack of ability to capture wider value (e.g. from proximate land price growth). • Existing funding tools (e.g. CIL, Gainshare, New Homes Bonus, Local Growth Fund) have individual merits but are difficult to align locally around strategic infrastructure priorities and to present as a compelling offer to investors, and so are less than the sum of their parts. • Value uplift created through larger-scale site-enabling infrastructure is not captured by those paying for it, meaning sites that offer development potential but require expensive up front infrastructure investment cannot be unlocked. • Local leadership and capability is a critical enabler to identify strategic infrastructure projects and unlock sites and schemes. Local areas are not sufficiently incentivised or equipped with the tools or capabilities to realise these opportunities. • Investors care about place and will act differently depending on local conditions. Using intelligence from major investors we can categorise local market conditions . This analysis should be the starting point for efforts to drive local infrastructure investment. 11 Source: DCLG 11
Investability Index of Local Market Performance Using Private Investor ‘ Investability ’ Criteria What private investors look for in a local market Major investors shared their criteria for ‘area investability ’ with us. We used 12 metrics to create an index covering market demand, the potential for land value uplift and the likelihood of planning approval We used this analysis to derive 3 primary market typologies (these are intended to be illustrative rather than conclusive about which intervention is needed in which place). 1. Strong market conditions Characterised by: High land value and value uplift as well as strong, relatively certain demand. Private sector investment heavily favours these market conditions. Strong possibilities to recoup public finance through uplift and income generation. 2. Mid market conditions Characterised by: Lower land values and uplift with variable demand. Private sector investment is project specific due to reduced certainty. Opportunities to recoup public investment since viability gap can be marginal. 3. Weak market conditions Characterised by: Low land values and uplift with weak local demand. Little private sector investment with the greatest uncertainty in long-term demand. Who we interviewed Cambridge 7 12 Newham 29 63 Swindon 77 143 Ipswich 161 163 273 Tees* 12 12
Housing Infrastructure Fund • Autumn Statement 2016: £2.3 Bn Housing Infrastructure Fund announced • “We will focus local infrastructure investment to unlock land for housing with a new £2.3bn Housing Infrastructure Fund to deliver infrastructure for up to 100,000 new homes in areas of high demand” • Funding to local authorities – projects must demonstrate strong VFM • Wide definition of infrastructure • Place-based approach – HIF on its own will not be the solution (local leadership and capacity, planning, public land, alignment of different funds, co-investment, portfolio/pipeline of projects etc. 13
To wrap up… Analysis remains central to good public policy But, analysts inform, politicians decide Need to be aware of ‘legitimacy’ – including public sentiment and behaviours Analysis is central to turning policy intent into actual policies, which can be implemented and deliver impact Good analysis is changing the way the Government works, especially central/local relationships More collaboration/joint working between HMG and areas to promote better ‘local delivery’ policy 14 14
Thank you Tony Bray Area Director – West Midlands, Cities and Local Growth Unit Department for Communities and Local Government and Department for Business, Energy and Industrial Strategy tony.bray@beis.gov.uk 15
Evidence Supporting WMCA Strategic Economic Plan Delma Dwight Head of Intelligence Black Country Economic Intelligence Unit Black Country Consortium Delma_Dwight@blackcountryconsortium.co.uk
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